Clearwire and Sprint Nextel said Wednesday they will combine their wireless broadband units to create a 14.55 billion U.S. dollar communications company.
The new company, to be named Clearwire, will receive a 3.2 billion dollar investment from Intel Corp., Google Inc., Comcast Corp., Time Warner Cable Inc. and Bright House Networks. The investment is based on a target price of 20 dollars per Clearwire share and will give the companies a 22 percent stake in the new venture.
Overland Park, Kansas-based Sprint Nextel Corp. will be majority owner with a 51 percent equity stake, while existing Clearwire shareholders will receive about 27 percent interest.
"The agreement enables us to get to market faster and reach a broader audience than we could have if we went alone," Dan Hesse, Sprint Nextel's chief executive officer, told analysts during a conference call Wednesday.
Clearwire, which will concentrate on rolling out a mobile network based on the emerging WiMAX standard, will also receive an investment from Trilogy Equity Partners, led by U.S. wireless industry veteran John Stanton.
Rivals such as AT&T Inc. and Verizon Wireless have eschewed WiMax, opting instead for upgrades to their current wireless broadband networks and a future technology called Long Term Evolution.
Clearwire already provides wireless Internet service in some parts of the country, using a WiMax-like technology. The company had a subscriber base of nearly 400,000 wireless broadband customers at the end of 2007.
The deal, which has been approved by the boards of all companies involved, must be approved by Clearwire shareholders and regulatory agencies, but is expected to close during the fourth quarter. The company will apply for a Nasdaq listing under the ticker "CLWR."
Source: Xinhua/Agencies
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